Anora H1 sales up 14.4%

Koskenkorva Vodka owner Anora Group saw net sales rise by 14.4% in the first six months of 2023, however its profit was hit by ‘weak’ Swedish and Norwegian currencies.

Following a sales rise of 9% in the first quarter (Q1) of 2023, the Finland-headquartered company saw net sales increase by 10.2% to €183 million (US$197.6m) in the second quarter (Q2), boosted by the firm’s 2022 acquisition of Globus Wine.

However, the weakening of the Swedish and Norwegian crowns, as well as increased input costs, has had a “a significant negative impact on sales and profitability” in Q2, said CEO Pekka Tennilä.

“The gross impact of exchange rate changes on profitability is estimated to have been almost €5m (US$5.4m) during Q2, and €9m (US$9.7m) in January-June.”

Tennilä noted that the cost of goods, including energy, barley and glass bottles, was “significantly higher than last year”, and the product mix was negative.

“The profitability improvement plan for Globus Wine is progressing, but at a slower pace than planned, and there has still not been a positive impact on the bottom line.

“To improve profitability, a cost savings programme was launched in Q2, with a target of €6m (US$6.5m) in annual savings. A positive impact from the programme was already seen in Q2, with operating expenses excluding Globus Wine decreasing by €2.4m (US$2.6m). We plan to continue with price adjustments in the next monopoly pricing window in the autumn.”

Anora’s organic growth in local currencies was 1.3%, however with the currency exchange factored in, it decreased by 4.7%.

For the first half of the year, spirits net sales grew by 2.8% to €107.3m (US$115.9m), led by international sales.

The negative impact on the exchange rates on net sales was approximately €5m (US$5.4m).

On 15 August, Anora Group lowered its earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance for 2023 to €70–€78 million (US$77m-US$83m).

Second quarter performance

In Q2, net sales of the spirits segment decreased by 1.8%, amounting to €58.4m (US$63m).

In Norway, liqueurs was the best performing category in the quarter, while the rest of the main categories saw declines in both volume and sales. Despite this, Anora’s market share grew in a declining market.

In Finland, net sales rose, driven by growth in the grocery channel. This led to a more than 40% increase in the alcohol-free and low-alcohol beverages sector.

The Baltics led double-digit growth in international markets, and good development in exports contributed positively to net sales.

Meanwhile, despite a sales decrease in Denmark, gross profit increased thanks to the profitability focus in the market.

In Sweden, the vodka category grew in volumes and net sales, but whisky, aquavit and gin struggled, causing Anora’s market share to decline.

The Koskenkorva brand was the strongest performer across all regions, with double-digit sales growth. The brand represented 15% of the firm’s total spirits sales.

Looking ahead for the rest of this year, Tennilä said the company remains “highly focused on executing our strategy and strengthening profitability.

“This includes the savings programme, price adjustments, and a focus on reducing net working capital and improving inventory turnover.”

New appointments

Anora has also appointed Risto Gaggl as senior vice-president, Industrial, and member of the executive management team, effective 1 January 2024.

He will take over from Hannu Tuominen, who will retire at the end of this year.

Gaggl brings more than a decade of experience in supply change management and international operations to the role.

He previously held the position of chief supply chain officer at Fiskars Group, prior to which he held several international positions at Elcoteq, the latest of which was vice-president, business excellence.

“Under Hannu Tuominen’s leadership, Anora’s Industrial business and supply chain expertise have been taken to a completely new level,” commented Tennilä. “For example, Anora has become one of the pioneers in sustainable supply chain management internationally in our industry.

“Thanks to his experience, Risto Gaggl is an excellent choice to continue the further development of our Industrial business, one of the most important focus areas of which is the implementation of our centre of excellence strategy.

“I want to extend my heartfelt thanks to Hannu for his important and successful contribution and welcome Risto to Anora’s management team.”

Gaggl added: “It’s great to be able to work with Anora’s well-known and valued brands and to be part of the team in implementing Anora’s growth strategy together with the company’s top professionals, both in the Industrial business and in the entire group.

“Anora has done pioneering work in responsibility, for example at its Koskenkorva Distillery, which operates based on the circular economy. I am also looking forward to developing sustainability matters together.”